GBP / CAD Exchange Rate Increases Despite Rising Oil Prices
The pound against the Canadian dollar (GBP / CAD) is up 0.2% today. The pair is currently trading at around 1.71 Canadian dollars.
The Canadian dollar (CAD), correlated with commodities, failed to rise today, despite the fact that oil prices rose to $ 70 as demand and the outlook for the global economy improved.
Bjornar Tonhaugen, Head of Oil Markets at Rystad Energy, explains:
“Starting this summer, the market expects a serious recovery in global oil demand. As vaccination campaigns advance and restrictions are lifted soon in Europe and other recovering economies, the demand for road and jet fuel will grow and the results will be felt. ”
Loonie investors, however, are increasingly worried about Canada’s controversial response to the Covid-19 situation.
As a result, concerns about a third wave affecting the country have reduced the demand for CAD.
Canadian economic data released the latest building permits for March today, which beat forecasts and rose 5.7%.
Today, there was also a deficit in the last trade balance of Canada. This led to a depreciation of the pound against the Canadian dollar as investors became more cautious about the outlook for the Canadian economy in the coming months.
Pound (GBP) Exchange Rate Rises As UK Economic Outlook Improves
The Pound (GBP) exchange rate rose today as the outlook for the UK economy continues to improve. Epidemiologist and government adviser Neil Ferguson has also expressed confidence in the UK’s response to Covid-19.
“While we can see that currently the number of cases is actually plateauing – and they may start to rise – mortality, the number of deaths and hospitalizations are still declining, and we expect them to continue to decline, perhaps slightly increase in the next month. but only within manageable levels, and this gives us a very good opportunity to stick to the state roadmap – loosen some restrictions in a couple of weeks and then many others in June. “
As a result, demand for the pound sterling rose on hopes that the UK economy could begin to recover during May and June, when lockdown restrictions are to be eased.
In UK economic news, the latest UK Manufacturing PMI for April was released today. The indicator exceeded forecasts and rose to 60.9.
Duncan Brock, Group Director of the Chartered Institute of Procurement and Supply, commented:
“The manufacturing sector was overwhelmed with optimism in April as the PMI rose to its highest level since July 1994, fueled by high new orders and the lifting of restrictions opened the door for business. This spike in activity was primarily driven by the domestic market, although much work from the US, Europe and China has shown that the global economy has also improved. The boom was largely beneficial to corporations as production growth from small producers continued to lag. ”
Pound-Canadian Dollar (GBP / CAD) Forecast: Can Upbeat Bank of Canada Raise Loonie?
Canadian dollar (CAD) traders await tomorrow’s speech by Bank of Canada (BoC) Governor Tiff Maclem.
Any upbeat comments on the outlook for the Canadian economy will push the CAD / GBP exchange rate higher.
Oil prices will also continue to determine the direction of the Canadian dollar this week. If oil prices continue to rise, the loonie will rise against the pound sterling.
Pound (GBP) investors will be looking ahead until Thursday when the Bank of England (BoE) announces its latest interest rate decision.
The rate is expected to remain at 0.1%, but upbeat monetary policy will drive the pound-Canadian dollar exchange rate higher.